Interest rates reduced to 6.25% per annum, what now?
South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced today the bank's latest decision on interest rates following the three-day meeting of the monetary policy committee (MPC)
The Bank reduced the repurchase rate by 25 basis points to 6.25% per annum .
There are a number of reasons that supported a cut. We do not have inflation problems for now. Growth was expected to improve but now expectations for growth have been reduced. Growth prospects have been largely driven by Eskom's inability to provide electricity to SA corporates.Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments
The Reserve Bank does inflation targeting to make sure that prices are stable in the interest of balanced and sustainable economic growth. We need 2,6% upwards, sustainably. We are nowhere close to that. We are facing an economic crisis.Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments
Potentially this is the first of two cuts this year but the Reserve Bank is likely to wait and see what happens in the budget and what Moody's is going to do - and the reaction of financial markets to that.Isaah Mhlanga, Executive Chief Economist - Alexander Forbes Investments
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